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How to Find and Close Small-Balance Commercial Mortgages

Commercial Mortgage
Posted on 
December 17, 2020

If you want to close small-balance commercial mortgages you need to know where to look for these deals and what to do once you find them.

For those of you new to the commercial mortgage industry, here are some tips for finding commercial mortgage leads and turning them into closed deals.

Where to look for commercial mortgage leads

  • CPAs: There are plenty of CPAs are doing taxes for small business owners and commercial property investors, and they know which clients cannot go to the local bank and will need other help. Get in touch with the accountants in your community and see if you can schedule a call or a virtual meeting to let them know that you have some non-traditional sources of money for their clients.
  • Realtors: Another great sources for commercial mortgage leads are the realtors in your area who work exclusively on commercial properties. The last thing they want is to lose their commission on a sale because their borrower’s financing falls through. Connect with them and explain that you may be able to help their non-bankable clients to finance a purchase.
  • Bankers: Banks are always looking to place the loans they cannot approve in order to preserve their relationships with customers. Contact your local branch managers and ask to speak with a commercial lender. Explain that you are generating commercial deals and you would like to know what the bank is looking for in terms of an application. Then let them know that you may have sources for their turn downs.
  • Local business owners: Think small. Choose a street in your town with a lot of mixed-use and commercial properties and start there. It’s as simple as printing up fliers and mailing them to these businesses. Whether they’re property owners looking to refinance in order to pay off a mortgage, buy new equipment, or secure working capital, or a renter looking to purchase the property, let them know about the services you offer as a commercial mortgage broker.
  • Your past book of business: Go back through the 1003s you have accepted over the past few years and look at the schedule of real estate. Is there commercial property listed? If yes, contact that individual and let them know that you can be of assistance if they are looking to finance that property now or in the future.

What to do when you find a lead

  • Learn about the borrower and the property. Before sending a commercial mortgage scenario to a lender, you need to get to know your borrower and their business. Make sure to ask them questions about the nature of their business, their financial situation and credit history, and the property itself. This is an important step because it will help you to determine which lender or lenders are the most likely to offer a commercial mortgage to your borrower.
  • Have a conversation with the borrower about what to expect. Another important step in this process is to have a discussion with your client about what they can expect in terms of rate and terms, especially if they’re non-bankable. Typically, the biggest stumbling block brokers face comes in the form of clients expecting a bank rate and terms when that won’t be a possibility for them. Make sure you manage their expectations from the beginning to minimize these issues.
  • Fill out a 1003 or commercial mortgage application and collect relevant documents. Once you’ve gotten to know your borrower and have given them an idea of what to expect, it’s time to submit the commercial mortgage request. Make sure to fill out a 1003 or commercial mortgage application completely and include all relevant financial documentation. This generally includes a credit report with scores and tradelines, an income & expense report or profit & loss statement, a rent roll if applicable, and an agreement of sale if it’s a purchase. Recent exterior and interior photos of the property are also very helpful to lenders.
  • Work with the lender throughout the process. Once the request is submitted and receives initial approval, it’s important for you to cooperate with your lender for the remainder of the lending process. They will likely have more questions and need additional documentation. The more quickly you and your borrowers can provide these things, the faster your loans will close.


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